Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Speech to the Master Builders Association: Democrats response to recommendations from Royal Commission into Building and Construction Industry.

Download PDFDownload PDF


Senator Andrew Bartlett Portfolio: Workplace Relations

Dated: 22 May 2003

Location: Gold Coast - Queensland

Senator Andrew Bartlett speaks to the Master Builders Association : Democrats Response to Recommendations from Royal Commission into Building and Construction Industry

Thank you. I am very pleased to be invited to speak with you tonight as Leader of the Australian Democrats about Commissioner Coles recommendations from the Royal Commission into the Building and Construction Industry.

As you are all no doubt aware the Cole Royal Commission was a very costly and politically charged exercise.

However legitimate the criticism may be of the motivations for, direction taken, and selectivity of the Cole Royal Commission, the Report properly draws attention to unacceptable industrial practices that challenge the rule of law, undermine the intent of the Work Place Relations Act, and adversely affect productivity efficiency and competition.

The Royal Commission found 392 cases of unlawful and inappropriate conduct. Evidence suggest that the industry suffers from a high strike rate; high level of workplace accidents and death; a high level of tax avoidance; widespread use of phoenix companies; collusion between contractors and unions; coercion in certified agreement making; breaches regarding right of entry; and breaches regarding freedom of association.

Our view is that given the environment of the Royal Commission we are justified in being cautious in our approach. However, we cannot avoid our duty to address genuine industry shortcomings.

The Cole Report will result in Government legislation. The Minster for Workplace Relations, Tony Abbott, has already announced that cabinet have approved Coles recommendations. We do not know whether they will cover all the bases at once in a package, or dribble the reforms out. However, we doubt that new legislation can be produced until August at the earliest.

So until we see the government’s legislation the Democrats are not prepared to signal anything in detail on Coles recommendations.

I assure you that we are examining the issues closely. We realise that on this issue we will probably have the balance of power in the Senate. We have been consulting with key stakeholders. We are undertaking additional research to inform our response to Coles recommendations.

What I can touch on briefly tonight are some of the considerations the Democrats are taking in shaping our final response.

The Democrats share a similar view to the MBA in that we also consider the restoration of law as being a core outcome of any reform package for the Building and Construction Industry.

The Royal Commission correctly identified weaknesses in the current mechanisms of enforcing laws of general application, including criminal law, industrial relations law and civil law.

However, while we recognise that the characteristics of the Building and Construction Industry are unique, we are not yet convinced that industry specific legislation is the way to go.

We know that there have been (and still are) instances where industries have had specific legislation, which may to some extent govern industrial issues. For example the Coal mining industry until 1994 was regulated by the Coal Industry Tribunal (now absorbed into the AIRC). So there is certainly precedent for legislation dealing with industries.

And separate legislation has the virtue of quarantining many issues, with the rest of the employer and union movements not being affected.

However in recent years the trend has been towards providing general laws and general tribunals, a principle the Democrats agree with.

Consistent with a universally applicable regime, the Democrats support a unitary industrial relations system, which means all Australians, employers and employees alike, would have the same industrial relations rights and obligations, regardless of where they lived

One of the first questions we asked ourselves is, are the problems identified by Cole and others, Industry wide?

Evidence suggest that the worst of the problems in the Building and Construction Industry are within the large commercial sector and the civil construction sector, are greatest in a few states (WA, Victoria and Queensland), primarily within urban centres.

The argument against this is that most of the construction is concentrate in urban areas and in NSW, VIC and QLD….Western Australia is an anomaly.

I noted that in MBA’s submission on the Cole Royal Commission Final Report, there is some recognition that problems are not prevalent, and I quote from the report….

“The industry’s real problem is a relatively small but undermining level of criminal and unlawful behaviour that attacks the moral fibre of the industry”.

Our concern is that new laws and infrastructure will take a long time to surface and will add to the cost and complexity of the current industrial relations system.

What the Democrats would be interested in pursuing is improving existing regulatory and law enforcement mechanisms and introducing general mechanisms that would also address issues facing the Building and Construction Industry.

For example, it is difficult to see how lawlessness, corruption and thuggery in both the employer and employee sectors of the Building and Construction Industry can be further addressed without at least considering mechanisms for exposing them - such as private sector whistleblowing, and perhaps racketeering legislation.

Enhancing criminal conspiracy provisions may tend to crack down on unlawful activities that are organised and coordinated.

For example, ensuring that organisations such as unions are held jointly responsible for the unlawful conduct of their officials and employees could provide a necessary level of organisational responsibility.

One area that I can comment on now is an area that the Democrats have long campaigned on.

The Royal Commission identified a considerable amount of wrongdoing that had never been reported to authorities.

The combination of widespread wrongdoing and a culture of victimisation and recrimination highlights the need for whistleblower protection legislation. Much impropriety will only be uncovered if the people in a position to reveal it are protected and compensated.

Private sector whistleblower legislation would establish a legal right for employees to make disclosures in respect of serious impropriety including criminal activity. Protected disclosures would include disclosures relating to acts or omissions causing serious risk to public health, safety or the environment and acts which constitute an offence or which impeded the legal process. It may also be appropriate to protect disclosures relating to a breach of certain provisions of the Workplace Relations Act.

This protection would be in addition to, not instead of, any existing protection that may be available to employees.

It should be an offence to take reprisals against an individual who has made a protected disclosure. Furthermore, such reprisals will give rise to a right of action, allowing victims to seek damages and other appropriate remedies.

Whistleblower protections are generally predicated on the existence of a relationship of employment. Given that the Building and Construction Industry is made up largely of contractors, the Democrats would also seek to have enacted specific whistleblower protection provisions that make it an offence to attempt to conspire with, induce or intimidate an individual or entity to not use the goods or services of a third individual on the basis that the third individual has made a protected disclosure.

Private sector whistleblowing legislation also address other issues facing this country such as those bought out in the HIH inquiry.

Another area the Democrats are looking closely at is the power of inspectors under the Workplace Relations Act and whether they are adequate.

Of course we would be careful in any recommendations we made on this matter and would avoid powers that would be considered draconian or infringing on civil liberties.

Increasing the power of inspectors under current structures would obviously not be enough, and without giving too much away, the Democrats would be keen to explore options to restructure current regulatory structures, perhaps as an alternative to establishing a costly industry specific body like the proposed ABCC.

Having discussed the Democrats preference for addressing general mechanisms, the Democrats are not against targeting. We would be in favour of extending the life of the Interim National Building and Industry Task Force and would consider providing additional resources to bodies such as the ACCC, ATO and AIRC to focus on the Building and Construction Industry. We would also support a review on the impact of general law changes and targeted programs on the Building and Construction Industry after say 3 years.

In not rejecting Cole out of hand at the outset we will distinguish ourselves from the Greens, who do. Their IR policy is opposed to ours. Not only do they oppose the Workplace Relations Act 1996 (WRA), but philosophically have hard left views. For instance they support compulsory unionism. We support freedom of association. Indeed they make a point of refusing donations from business, whilst willingly taking money from far left unions.

Although the ALP have been negative so far, it is hard (at this stage anyway) to see the Labor Party (or even the ACTU) ‘just saying no’ to everything, since Cole also addresses areas the ALP and the ACTU do want reformed (such as occupational health and safety, ‘phoenix companies’, and workers pay/entitlements.)

While I have not been able to give you detailed response to Coles recommendations tonight, what I can guarantee is our final response will be considered and fair.